When you see a course title like, Boardroom Exercise, expectations rise, so do curiosity and excitement. Even though it’s an elective course at CEU Business School, most of us registered for it probably for the same reasons. Course introduction by Prof. Tibor Voros cleared all the doubts and raised many others, so much so that 4 students dropped from the course after this introduction. The rest of us had quite mixed feelings actually. Some were brave and really wanted to see what comes next, others were apprehensive if they will be able to get as much benefit out of it. So, enough suspense, let me tell you more about this course.
The early semesters of MBA took us through topics like, Micro and Macro Economics, Marketing, Strategy, Finance & Accounting, Operations Management and few soft skills courses. All relevant to business, but in isolation they might not be as useful as they are when looked at as a whole. Together, these subjects allowed me to appreciate the big picture. Marketing without a Strategy doesn’t make sense, if there is no money to finance the operations, no marketing would help, today’s business leaders need to be able to look at the big picture, take inputs from all business functions and make decisions. This is more or less the background of Boardroom Exercise course.
The course is based on an industry standard Business and Strategy Simulation, Cesim Global Challenge, designed by Cesim, a Finnish Company and which has been played by over 50,000 students worldwide. In our case, the simulation runs in a Universe with 6 teams, 3 to 4 members each. Each of these teams represent a cellphone manufacturing company. Company is based in the USA, with manufacturing in USA and China and worldwide sales.
As leaders of the company, we are expected to run the company making decisions about investments, product features, marketing, operations, logistics, finances and try to maximize shareholder return. The simulation runs for 6 rounds, each round representing a year, so 6 years of operations. Winning criteria is the cumulative shareholder return at the end of 6th year, the team that generates maximum shareholder return at the end, wins. Simple. Watch this video to know more about the challenge.
There are so many challenges facing each team in this simulation, first is of course understanding the online tool and it’s features. Then understanding the market, consumer behavior, financial planning, tax and production cost optimizations etc. It’s equally important to work well as a team. There are so many aspects to this that it’s very hard to do all alone, every team member must contribute. I’m using all the technical and business skills I’ve learned so far at the school as well as the soft skills I improved, team work, leadership and negotiations. It’s been a great learning experience so far.
Usual challenges teams face are acknowledging the difference between simulation and real market behavior. Teams might do a great amount of planning and strategy development on paper, but if they fail to understand how markets and consumers behave, surprises are guaranteed. Second common mistake is ignoring the competition. Not paying enough attention to what competitors are doing and might plan to do next. Strategy formulation is as much based on past data analysis as it is on future predictions, they go hand in hand. And the third most common mistake is filling up numbers in the tool at the last-minute. It is not a tool where you put some data in and something predictable comes out. It’s a complex business simulation and each number you fill in should be based on a logic, detailed planning and analysis, something that cannot be done 2 hours before the deadline.
I’ll try to post a summary at the end of the course in July to share how it went and advice for future students.
If you want to know more about any aspect this business and strategy simulation, drop me a message anytime and I’ll be glad to help.